Societal Impact of AI: Government Policy

Debate between Ben Spencer and Esther McVey

Wednesday 8th July 2026 Westminster Hall

[Dr Spencer]

I thank the hon. Member for his challenge regarding a future hypothetical that has yet to be realised. I think I will be able to address some of his points, but I think the premise he is setting is a bit beyond the scope of this discussion. However, I can give some concrete proposals for protecting human jobs. As a starter for 10, rather than inventing a new tax, we could start with some old ones, and rather than inventing new regs, we could start with some newish ones.

The Labour Government’s approach has been to make it as difficult as possible to employ human labour by increasing national insurance contributions from employers; making it more difficult for younger people to compete in the workplace by increasing the minimum wage; and increasing employment regulations, making it a greater gamble for businesses to take on new starters. To support jobs in the UK, we should, before looking at AI, look at the Labour Government’s policies, which are uniquely designed to make it more and more difficult to employ a person over a machine.

We are right to think about the workforce implications of the adoption of AI, but the future is always unclear and uncertain; that is the challenge of working in this sector, and I am very mindful of that position of humility as I move on to the following, more specific remarks.

Other technological disruptions, while displacing jobs, have ultimately led to more jobs through elasticity of demand. As costs decrease through automation, demand increases. That is the story of what happened with mass manufacturing in the automotive sector: to begin with, people were concerned that mechanised manufacturing would reduce jobs in the sector. Of course, the car sector exploded because the cost of a car went through the floor, and as a net result there were more jobs in the automotive sector. The issue was that they were different jobs; it is more of a transition than a replacement.

There are signals and concerns that the current decrease in the number of youth jobs is due to AI. However, as my right hon. Friend the Member for East Hampshire said, it is unclear whether that is due to AI replacement, the current prevailing economic circumstances, or a mixture of the two. The data remains unclear, but I appreciate that we need to be thinking now about what possible futures could unfold. Equally, our tech sector provides growth and jobs. The UK could be the world’s fastest AI adopter, but only if it is not punished with burdensome taxes and regulations. We are already seeing a hint—just a hint—of what AI can offer, especially in the research and health sectors. Our economic future needs AI, or we are going to be left behind.

Before I come to my final questions for the Minister, let me touch on AI and tech sovereignty, which is increasingly being talked about in the media and in this place as people focus on it more and more. AI and tech sovereignty, as described in this debate and in other forums, is illusory. We work and operate in global supply chains, with technology enmeshed around the world. Whether it is microchips built by TSMC in Taiwan, microchip etches created in the Netherlands, quantum tech built in the UK or frontier models, most of which are based in the States, our sectors are completely and utterly enmeshed.

Rather than talking about tech and data sovereignty, we should be talking about resilience and leverage. What are the core functions and features that we want to have on domestic soil? We can have a discussion about that. What should it be necessary to have on British soil, and what are the core technologies on which we want to be elite? We want to be world leaders, and to be indispensable to the world so that it looks to us, as opposed to the other way around. We need resilience and leverage rather than to chase the illusory rainbow of tech and data sovereignty.

Given my remarks about regulation and competitiveness, can the Minister rule out any part of the UK being brought into the EU AI Act? That would reduce our competitiveness with the EU. Will the Minister summarise the impact on the UK AI sector of Government taxation and employment policies? Have they been positive or negative? If they have been negative, to what extent? Can he confirm that there will be a decent statement before recess, as has been promised, on social media and the regulation of chatbots? Has he spoken to the virtual Prime Minister, the right hon. Member for Makerfield (Andy Burnham), about the importance of anti-protectionist policies in the UK’s AI sector?

[Esther McVey (in the Chair)]

I call the Minister, mindful that I would like to give some time to the hon. Member for Poole to wind up the debate.